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UPDATE 2-Norway oilfields restart, focus shifts to gas
January 12, 2011 / 9:51 AM / 7 years ago

UPDATE 2-Norway oilfields restart, focus shifts to gas

* Fields to hit full capacity of 157,000 bpd later on Wed

* Norway gas exports hit daily record high on Jan. 3

* Piped gas sales hit record of 97 bln cubic metres in 2010

* Statoil says mulling second LNG Snoehvit plant

(Recasts with LNG, Snoehvit)

By Wojciech Moskwa and Gwladys Fouche

OSLO, Jan 12 (Reuters) - Norway restored production at two North Sea oilfields on Wednesday, helping boost supplies to a tight oil market, as its natural gas exports hit record highs and energy champion Statoil said it is mulling more LNG output.

The outages at the two fields, which jointly produce some 157,000 barrels per day, had added to worries about global oil supplies on Tuesday amid problems at a key Alaskan pipeline.

The news of record gas sales in 2010 comes a day before the Norwegian Petroleum Directorate gives its annual production outlook and resource estimates and confirms Norway’s decade-long turn from an oil into a gas-producing nation.

Norway is still the world’s fifth-largest oil exporter but oil production has dropped by a third since peaking in 2001 to roughly 2 million bpd. Last year, it overtook Canada as the world’s No. 2 gas exporter after Russia.

Statoil (STL.OL), Norway’s biggest oil company, said its Snorre and Vigdis fields in the North Sea had restarted after a 20-hour shutdown and would reach full capacity on Wednesday.

“The fields are up and running,” Statoil spokesman Ola Anders Skauby said on Wednesday. “We expect full production at Snorre and Vigdis to resume during today.”

The fields had been shut after a gas leak at the Snorre A platform, which also receives oil from the nearby Vigdis field.

“We are carrying out an internal investigation to determine the details of the incident,” Skauby said.

Oil output is down as production at mature fields has fallen short of industry expectations and no major oil discoveries have been made since Eni’s (ENI.MI) Goliat find in the Barents Sea in 2000 with 192 million barrels of recoverable reserves.

Nevertheless, Norway’s steady legal environment and tax incentives have fuelled record investments by oil and gas companies on the Norwegian shelf and helped maintain its role as one of the world’s most dependable oil producers.

Norway’s fields have been dogged by outages in past months, one of the reasons why Statoil had to cut its production guidance last November. [ID:nLDE6A209Z]

North Sea oil output is seen up by 4.8 percent next month to above 2 million bpd, but over the course of 2011 oil production offshore Norway is expected to decline yet again as oilfields mature. [ID:nLDE70A169] [ID:nLDE70610N]


But as oil exports drop, sales of natural gas continue to rise with piped exports to other European countries hitting a record 97.3 billion cubic metres last year, up 700,000 cubic metres from 2009, pipeline operator Gassco said on Wednesday.

It said that Norwegian gas now meets almost 20 percent of overall European Union consumption, with higher levels in the big markets of Britain and Germany. Norway’s gas production is set to overtake oil output in 2015. [ID:nLDE6AA1B1]

Norway’s gas exports also set a new daily record of 360.8 million standard cubic metres on Jan. 3, 2011, topping a previous high of 355.4 million from Jan. 15, 2010.

Gassco said the regularity of deliveries, which averaged 98.8 percent, declined slightly in 2010 due to planned and unplanned maintenance at Norway’s Kaarstoe and Kollsnes processing plants -- responsible for more than half of exports.

“These two units had shutdowns for planned maintenance and upgrading during 2010, while both also experienced technical operating challenges,” Gassco’s chief Brian Bjordal said.

Statoil also said on Wednesday it would consider building a second liquefied natural gas (LNG) plant at its Snoehvit facility in Arctic Norway. [ID:nOSN004937]

Snoehvit, which produces 5.76 billion cubic metres of gas per year, is Europe’s only LNG production facility and allows Norway to ship its gas to remote markets at a time when European gas prices have not kept up with gains seen in oil prices.

“A possible investment decision may be made towards the end of 2013 at the earliest, and the plant can be expected to be online in 2018, at the earliest,” Statoil said in a statement.

Statoil reiterated the existing plant, which is down due to repairs, is due to restart during the second half of January. (Additional reporting by Walter Gibbs; editing by James Jukwey)

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